Brazil's Central Bank Considers Blockchain Settlement Prototype

Brazil's central bank is seeking to investigate possible use cases for blockchain tech and is now moving toward prototyping.

AccessTimeIconSep 5, 2017 at 8:00 a.m. UTC
Updated Sep 13, 2021 at 6:53 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Brazil's central bank has released a new research paper that details possible use cases for blockchains and distributed ledgers while outlining how various available platforms could be used to test the technology.

The result of a study group initiated by Banco Central do Brasil and published August 28, the report looks at use cases for DLT including identity, local currency and settlement – though, just the latter was ultimately recommended for prototyping.

The objective, however, is not to design a primary settlement platform for the central bank, but to create a "minimal" backup system for funds transfer in the event of a "complete main [settlement system] meltdown."

The report states:

"In the case of its catastrophic failure, RTGS members would be unable to send (or receive) funds to (from) each other, leading to a complete financial halt. ...  In this context, the Alternative System for Transactions Settlement (SALT) is a conceptual system for a contingent solution that would be able to immediately replace core functionalities of the main Brazilian RTGS in case of its full collapse."

The authors indicate that the design of this system includes a permissioned blockchain network in which financial institutions and the central bank itself are the validating nodes.

They study concludes that, although privacy is a potential issue, DLT "could make possible to create a unique shared view of a large variety of information fed and replicated across institutions."

In this way, the paper is in line with studies commissioned by other global central banks.

The Bank of England and the Monetary Authority of Singapore, for example, have examined how blockchain could be applied to settlement, though the UK central bank has perhaps gone the farthest to date, reporting its newest settlement system will be "distributed ledger compatible."

Brazilian currency image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.